For many people, investing in lump sums is challenging. Such persons may find the Public Provident Fund (PPF) and Recurring Deposit (RD) schemes to be of great assistance. You can amass a sizable corpus by making monthly investments in these programs. We’re letting you know about these programs so you can make an investment based on your needs.
Interest in PPF is 7.1%.
Anywhere in a bank or post office can open this scheme. It can also be transferred to any bank or post office addition to this.
If it has been opened, it can be removed for just 500 rupees. A total of Rs. 1.5 lakh may be placed into this account each year.
This program has a 15-year term and cannot be terminated in the middle of it. However, it is extendable for an additional 5 years after 15 years.
It cannot be closed before 15 years, although it is possible to borrow money from this account after 3 years. From the seventh year, according to the rules, anyone can withdraw money from this account if they so choose.
Every three months, the government reviews the interest rates. This interest rate is flexible and might vary. Currently, this account is earning 7.1% interest. The benefit of tax exemption up to Rs 1.5 lakh can be obtained under 80C by investing in this scheme.
How much return can you expect from a 15-year investment?
If you invest a thousand rupees each month for 15 years according to this plan, you will receive approximately 3.20 lakh rupees at the end of that time. Thus, you will receive interest that is greater than Rs. 1.40 lakh.
Interest in RD is 5.8%
Postal Service RD now receives an interest rate of 5.8% per year. A particular kind of tiny savings plan is RD. Aside from the post office, anyone can open an account at a bank.
A monthly minimum investment in the RD scheme is Rs 100. Any sum above this can be deposited in increments of 10. The maximum deposit amount has no upper bound.
Additionally, one or more RD accounts may be opened. Minor children may also start this account in their names. If you are 10 years old or older, you can use it on your own. A joint account can be opened by three people.
You can save a lot of money with RD’s assistance. It can be used as a piggy bank. Meaning that if you continue to contribute a set amount to it each month when your paycheck arrives, after five years of growth, you will have a sizable sum in your possession. For more information, go here.
What kind of return can you expect if you invest 1,000 every month for 15 years?
If you invest a thousand rupees each month for 15 years according to this plan, you will receive roughly 2.86 lakh rupees. Thus, you will receive interest that is greater than Rs. 1.06 lakh.
In what to invest?
The PPF scheme is good if you can invest your money for 15 years. 7.1% interest is being paid on it. At the same time, RD is earning 5.8% interest. But it also has a 5-year lock-in term, which is substantially shorter than PPFs. You can select the best plan for you based on your financial situation.
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